SA’s unemployment rate has ticked up in the first quarter of 2024, bringing bad news to the governing ANC as opposition parties sharpen their knives to pounce on the party’s failure to curb joblessness ahead of this month’s crucial election.
The unemployment rate rose 0.8% to 32.9% in the first three months of year, according to Stats SA, as tens of thousands of jobs created in sectors such as manufacturing, agriculture and mining failed to offset losses in finance, construction and community and social services, which includes government services, education, social work and other community development.
Under the expanded definition of the unemployment rate, which counts not only those seeking work but those too discouraged to look for a job, there was an increase of 0.8 percentage point to 41.9% in the first quarter.
As SA gears up for general elections on May 29 this static is likely to become a rallying cry for opposition parties, which are likely to use it as evidence of governance gone awry. The ANC is facing its toughest election, which several polls have shown is likely to see no clear winner.
Efficient Group chief economist Dawie Roodt said there was frequent load-shedding during the first quarter, which could have resulted in the unemployment figures going up.
He said the private sector was concerned about the outcome of the polls. “The markets are adopting a wait-and-see kind of approach. But I think we will see an outcome that the financial markets — and the economy broadly — will be happy with. That could accelerate economic growth and job creation.”
The reversal of the unemployment rate hinged on the election outcome, he said. “Surely, this is not good news to the ANC because they are the ruling party.”
Cosatu acting national spokesperson Matthew Parks said the ANC-aligned labour federation noted with disappointment the latest unemployment figures.
“While this is not unusual for the first quarter of the year, which normally follows a seasonal increase in jobs over the festive holidays and retail peak period during the fourth quarter of the year, it is nonetheless disappointing,” he said.
“Though we are frustrated by an increase in unemployment, we appreciate that this is not surprising given the challenges at Transnet that the mining, manufacturing and agricultural [sectors] experienced during the first half of the first quarter and the fourth quarter in particular.
“We are heartened by indications in the jobs report that the mining, manufacturing and agricultural sectors are showing signs of recovering from the challenges they encountered in transporting their exports.”
Parks said the Stats SA report is a “sobering reminder that we cannot sustain the current levels of unemployment and that while we are seeing critical progress on many fronts ... much more remains to be done to unlock the economy and slash unemployment”.
He counted among the successes “the massive decrease in load-shedding, to the reduction in congestion at our ports, the reopening of various freight and commuter rail lines, the increase in revenues collected by Sars and significant investment injections by such international giants as VW and Hisense”.
He said: “Unemployment is the heart of our socioeconomic challenges. It must be at the heart of government and the private sector’s plans. Businesses in particular must halt retrenchments and engage with labour on alternatives. What we cannot afford to do is send more workers to the unemployment queue.
“Unemployment needs to be tackled with the same sense of collective urgency and determination as we successfully tackled the Covid-19 pandemic.”
SA Federation of Trade Unions general secretary Zwelinzima Vavi said the unemployment data showed SA suffered from structural unemployment: “Those structural faults are inherent in the capitalist mode of production, which takes a neocolonial character and a neoliberal form. The nature, the character and the form interact to produce these explosive levels of unemployment.”
Vavi said the government’s refusal to fiscally stimulate the economy through a basic income grant and to spend sufficiently on infrastructure, and its defunding of state companies have led to “massive retrenchments in state-owned enterprises and prevent the productive sectors from growing on the back of increased aggregate demand”.
He continued: “Restrictive monetary policy has consistently made it difficult for businesses to grow because of the increased debt/credit service costs, sometimes contributing to defaults and bankruptcies of business enterprises. This results in company collapse and closures.
“For example, between January and March, 385 businesses have been liquidated. Though restrictive monetary policy might not be the sole factor, it certainly contributes to some of these liquidations.”
Update: May 14 2024
This article has been updated with new information.
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